Apple Prepping its Own Music Streaming Service

Apple may be looking to take on Pandora with its own online music streaming service in the coming months. The service is said to be compatible with the iPhone, iPad, iPod touch and the Mac, and like Pandora, will offer the ability to set up custom stations that cater to individual listener's musical tastes.

Insider sources told the Wall Street Journal Apple won't offer its music service on Android OS-based devices, although the company is considering including support for Windows PCs.

Apple is apparently negotiating with record labels for licensing terms that are more flexible than the government mandated terms Pandora works under. If Apple can swing a deal, it may be able to offer more interactive features for its listeners and also work around restrictions on how often specific songs can be played.

Apple's music streaming will be ad-based so listeners won't have to pay monthly fees, and it is expected to handle ad placement through its iAd service.

iCloud users already have a small taste of Apple's first steps into online streaming thanks to iTunes Match. For a US$25 a year subscription fee, users can store their iTunes music library online and access songs from any of their OS X, iOS and Windows devices. This new service will expand that to songs subscribers don't already own.

Assuming Apple does launch its own streaming music service, sources expect it will roll out in the next few months.

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Apple has clearly been successful with its iTunes Store and already has a huge base of potential customers thanks to the popularity of the iPhone, iPad and iPod touch. Coupled with a free service, Apple could offer Pandora some real competition in the online music streaming market.

That said, Apple also has features like Ping that still haven't caught on, and some customers are a little shy of the company's online services thanks to inconsistent reliability. Unless Apple gets its music stream service right from the beginning, the company may have trouble drawing listeners away from Pandora.